9911796707
TMI Blog2014 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was treated under-valuation of closing stock by the AO and same was added to the income of assessee - As per the assessee it was following the FIFO method for valuation of closing stock - AO had adopted the average cost price of POY for arriving at the closing stock for the year under consideration - while finalising the assessment, AO had not challenged the method of valuation of closing stock adopted by the assessee i.e. the FIFO method - As per the settled principles of tax jurisprudence when the assessing authority does not accept the assessee's method of accounting/valuation then he can exercise power under section 145 of the Act to make such computation in such method as he determines fit for deducing the correct profits and gains, but the power of the AO to choose the basis and manner of computation of income is not an arbitrary power to assess the income-he must exercise his discretion and judgment judicially - From the orders of the AO and the FAA it transpires that they have decided the issue of valuation of stock without considering the method of valuation adopted by the assessee – thus, the order of the FAA is set aside – Decided in favour of Assessee. - ITA No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee could not clarify the reason what prevented it to produce the TDS certificate dated 24. 05. 2005 showing credit of voucher of Rs. 1, 49, 565/-and deduction of Rs. 3127/-as tax thereon, that the assessee had produced zerox copy of TDS vouchers, that the assessee's claim could be considered only if original TDS voucher and on verification of details of payment of transport charges. The assessee was accorded an opportunity to make submissions with regard to the AO's report. The assessee, as per letter dated 14. 12. 2007 submitted that the original TDS certificate was issued to the transporter which could not be produced before the AO, that he had verified the transportation charges at the time of assessment proceedings. After considering the submissions of the assessee and the assessment order he held that the proof of payment of TDS was not filed during the assessment proceedings, that the assessee had failed to explain any reason what prevented it from furnishing the evidences before the AO, that the assessee could not be allowed to rely upon the additional evidence produced for the first time during the appellate proceeding without being able to estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax before the AO. Ground no. 1 is decided in favour of the assessee, in part. 3. The next ground of appeal (Ground No. 2) is against disallowance of addition of Rs. 8, 09, 747/- on account of difference in valuation of closing stock. The relevant facts, as appearing from the assessment order, are that the AO found that the assessee had shown an increase in closing stock in the P L a/c. , that as per Schedule-3 there was no opening stock, that the value of closing stock was shown out of purchases made during the year. The assessee furnished quantity wise details of opening and closing stock and method of valuation of closing stock as required by the AO. After examining the details of the valuation of stock, he held that the assessee had deliberately made wrong calculation of closing stock of POY and finished goods and made an addition of Rs. 8. 09 lakhs to the total income of the assessee. 3. 1. Against the order of the AO assessee preferred an appeal before the First Appeal Authority (FAA). During the appellate proceeding it was submitted by the assessee that there was a mistake in Schedule-3 of the P L Account, wherein instead of showing the closing and opening stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, FAA held that the bill was with regard to purchase of POY and not finished goods, that the value of closing stock of the finished goods was to be taken at the cost of raw material as well as manufacturing cost as had been rightly done by the AO, it was not the case of the assessee that the rate of manufacturing cost determined at Rs. 5. 92 by the AO was not correct, that the AO had correctly adopted the rate of Rs. 98. 01 for the value of closing stock of finished goods, the assessee had not been able to furnish any basis for adopting the rate of Rs. 60. 03 for valuation of closing stock of finished goods. As a result, the determination of value of finished goods at Rs. 22, 22, 939/- and addition of Rs. 8, 09, 747/- as difference in closing stock to the total income of the assessee, on account of under valuation of closing stock by the AO, was upheld. 3. 2. Before us, Authorised Representative(AR) submitted that the value of opening stock and closing stock as on 31. 03. 2004 and 31. 03. 2005 was Rs. 9, 89, 192/-and Rs. 14, 60, 940/-respectively, that the difference between the values of the opening and closing stocks i. e. Rs. 4, 69, 423/-was shown in Schedule- 3 to the P L ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
